CPEC: A Game Changer

Source: Internet

By Naveed Qazi | Editor, Globe Upfront

China has been Pakistan’s number one friend for a number of reasons under the current strategic context.  It is not only extending its military and political backing, but is also willing to lend a push to the economic environment inside Pakistan as well. 

CPEC is a mega-project investment and is perhaps the biggest of its kind in the region. The assistance is bigger than what the United States has given Pakistan since 2002.

The corridor has been in the news for all the right and wrong reasons. It is yet again showing that Islamabad is getting closer to Beijing and its alliance with Washington is slowing declining.

Infrastructure development capabilities and harnessing the potential of Pakistan’s natural reserves will strengthen CPEC goals, but lack of transparency in their financial agenda has recently caused retaliatory attacks.

Economic experts believe that it will add immense economic activity inside Pakistan including construction of special economic zones, pipeline ventures, roadworks, telecom projects, internet technology-based projects, rail works, social sector development projects and renewable energy projects.

China, on the other hand, believes in reaping benefits by this agreement by the quicker availability of energy resources via Pakistan from the Middle East by avoiding the Malacca Strait and the South China Sea.

The CPEC project investment is intra-Pakistan in nature that is targeting income-generating sectors. Projects have been identified in transit routes across the country. It starts from Xinjiang in China, passes from the Gilgit-Baltistan region in the north of Pakistan and will extend up to Gwadar port in the south. 54$ billion is the current investment plan for the development corridor. About 19 million tonnes of crude oil will be directly transferred to China through Gwadar. 17,000 megawatt of electricity will be produced.  To add to that, China will have a shorter route to enter African, West Asian and South Asian trade, where already a huge number of Chinese entrepreneurs and workers are based.

On CPEC website (www.cpec.gov.pk), about 67 working projects have been cited. The Pakistani government believes that the framework on which the investment project is designed will have a positive impact on Iran, Afghanistan, India and Central Asian Republics. And CPEC also claims to enhance academic, cultural, regional knowledge and transfer of human capital and services. 

While Pakistan’s current electricity generation fulfils the domestic requirement, more production can likely be used to sell electricity and improve circular debts. The project already has gained hostility in the Balochistan region, which has weak relations with the central government. Balochi activists also fear the influx of non-Balochis in the region. This has prompted the Pakistani government to increase the security network in the region. Already Special Forces are being deployed in the Balochistan region to protect the newly constructed superhighways.

On the other hand, a stronger relationship with Gilgit Baltistan region from the centre will likely be expected in the coming time. So clearly, there have been regional political implications affecting the investment scenario inside Pakistan courtesy of China. Some of the regional politicians in Pakistan are already criticising the project because it does not pass through their areas. This aloofness can even lead to a civil discontent because CPEC has promised 700,000 direct jobs till 2030.

CPEC also remains vulnerable to terrorist attacks. Xinjiang is home of Uighur Muslims and is a breeding ground of a separatist movement. China has been repeatedly blaming the Uighur extremists in the recent surge of violence. In the past, NATO supplies passing through Pakistan have also been targeted by the Taliban. So Pakistan and China need to make no stone unturned in designing a robust security plan. Troops are already being recruited to protect Chinese workers and enterprises on the corridor but more needs to be done.

The corridor is currently being marketed as a win-win situation for both the countries. Pakistan has the potential to become a direct beneficiary of China’s manufacturing sector, while China can also benefit from the agricultural and aqua sector of Pakistan. Only time can decide which country would benefit more in the longer term.

Pakistan is aiming to become an upper middle-income economy till 2025 but India clearly is unhappy with the Chinese funded project because it passes through the Pakistani administered Kashmir and is beginning to change the power dynamics in the SAARC arena as well. Kashmiri nationalists are already opposing the CPEC. It will also strain the existing Indo-China relationship. Also, due to the fact that Chinese still make an active presence in the Gilgit Baltistan region.